As an Experienced Chief Financial Officer in the maritime industry what were the difficulties the industry faced during the pandemic and what are your expectations for 2022?
The COVID-19 outbreak has affected all segments of our daily lives, causing a huge impact on the general population, families, communities, and economies.
Maritime industry, being a fundamental sector for the worldwide transportation of goods across the continents, has and is still facing an unprecedented challenge to overcome the difficulties caused by the pandemic and to keep serving, undisrupted, the global needs. Throughout this process, technology has proven to be a great ally, forcing changes in issues like paperwork, business meetings, work with physical presence, thus introducing a new era of digitalization and “smart” work.
The pandemic has led to numerous unpleasant situations due to restrictions at borders. Millions of seafarers have been kept at sea longer than they should have or have been caught up in delays. Requests for repatriation were refused and medical attention in case of emergency has been complicated. Furthermore, the ability of flag state authorities to conduct statutory surveys and the continuous extensions granted for required certificates, have quickly raised concerns about maintaining safety and performance of the vessels.
Meanwhile, with warehouses full or closed, some retailers and manufacturers have refrained from picking up cargo and containers, causing considerable port congestion. And in case a port has stayed opened, work has to be done with a reduced workforce, which only worsens the congestion and disrupts the supply chain including imports and exports. In that aspect, the dry bulk shipping industry profits from this situation as the high freight rates can be partially attributed to those restrictions and problems which are tying up ships for longer than usual. At the same time, the lower interest rates form friendly terms for refinancing existing mortgages and investing in the secondhand market.
For the next year, the market is looking promising and expected to stay strong. The new environmental regulations coming in force will reduce gradually the availability of vessels, which will sustain the freight rates to the high levels.
Of course, what the pandemic has taught us, is that everything can turn upside down in an instant.
* Chief Financial Officer Newport S.A.
The answer was provided for NAFS magazine issue 143 in its special report “WOMEN in SHEPPING”